Following trends: #150bucklaptop #DTBacklash #BigBreakUp

Starting a regular feature here, following trends.
#150bucklaptop — Walt Mossberg reviews a Lenovo laptop that retails for under $150 and runs Windows 10. His bet? A two-sided market:

I predict that, over time, the Windows laptop market, which has long clustered in the $400-700 range, will gradually fragment into very low-end and very high-end segments — the former to take on Google and the latter to take on Apple. I expect the middle to thin out, as customers on a budget go for the cheaper models and those who want and can afford the latest and greatest go higher.
Microsoft, eager to push Windows 10 and presumably concerned about Chromebooks, also appears to be giving companies like Lenovo a hand with deals like the free year of Office with hefty cloud storage. Lenovo wasn’t the first big PC maker to sell a Chromebook-priced Windows PC. HP last year started selling a $200 Windows laptop with an 11.6″ screen called the Stream. Asus has one, too.
While the Lenovo is the only non-refurbished Windows laptop I could find on the Best Buy website for $150 or less, there’s reason to think that more and more PC laptops will find their way into Chromebook price territory, typically $295 or under. That’s mainly because Microsoft is on a core corporate mission to convert the masses to Windows 10. And its hardware partners, who have been struggling for years, need good relations with the software giant to sell more of the machines they really want to push: the $1,000 class of laptops long dominated by their common adversary, Apple.
Also, let’s face it: the basic PC laptop, the one that doesn’t try to act as a tablet as well, has become commoditized. And Windows 10 can run acceptably on a surprisingly wide range of hardware.

The deeper trend may be toward zero-cost laptop, where Microsoft may decide that underwriting the hardware and software for a laptop is worth it if someone signs up for a few years of Office, or some other web service (Adobe? Google?).
#DTBacklash — Gartner continues the deluge of apocalyptic preaching about digital transformation that has started to cause a backlash (see The Inevitable ‘Digital Transformation’ Backlash).
#BigBreakUp — The breaking apart of established enterprise software companies — and the mergers bucking the trend — remains in the foreground of the news with the results for the two sides of the HP break up. HP Inc and HP Enterprise closed the quarter with combined sales down 7%. HPE is projecting 37 to 41 cents per share for the quarter ending February. We’ll see. But HP Inc — which is the half selling PCs and printers — witnessed a drop in desktop PCs of 17% and in laptops of 5%. With the price pressures of the #15bucklaptop, I would short HP Inc. The #BigBreakUp is going to be around as long as the Greenland ice cap, I bet.

Is mobile dating the new ride sharing?

Silicon Valley has always been ground zero for predicting the latest mobile trends — just look at the runaway success of Uber. But given how many singles are finding love via mobile app these days, are we entering the age where mobile dating is the must-do trend in the Valley?

Despite rough month, Yahoo at the top of PC traffic in December

To say December wasn’t a pretty month for Yahoo (s yhoo) would be quite the understatement. Between its protracted troubles with its Mail client and hiccups with services like Flickr, Yahoo was on PR clean-up to keep users happy. But, apparently its users just don’t know how to quit it, as ComScore revealed Tuesday that Yahoo remained the most trafficked website for December 2013 for desktop PCs in the U.S., barely edging out Google (s goog). While the desktop-only caveat is not to be ignored — it signals an older age bracket and doesn’t reveal Yahoo’s standing on mobile — Yahoo’s still entrenched in long-term user loyalty, for better or for worse.

Why are financial analysts so dumb about technology?

We are in a curious time of the year. Software companies in the US seem to delay product releases to miss the first few weeks of the year — perhaps because so many take time off at the holidays — so I have seen a number of product updates that are coming out soon, but which I have been asked not to talk about until they are released. So, the things that are top of mind will have to wait.

Recently, we’ve seen a lot of financial and market results that — once again — underscore the trend lines in the ‘computications’ device business (see How fast and far can Intel fall?):

  • Intel announced numbers this past week that indicated demand is at best flat for personal computer chips, and this led to a fall in the company’s stock, and — in combination with other data — the S&P fell over 7%, and companies in related niches — VMware and Citrix — fell in tandem. Intel also announced plans to cut its workforce 5% a few days later.
  • On the other side of the companion device/PC divide, Apple and Samsung are projecting huge numbers of tablets for 2014: 80-90 million units and 60-70 million units, respectively.

I don’t get why the market can be ‘surprised’ by the slumping fortunes of Intel or the dinosaurs that are trying to sell access to cloud computing that is premium priced relative to Amazon’s. This is one example of the way that financial analysts seem dumb. My bet is they think change is happening slower than it is, or as McLuhan said

We look at the present through a rear-view mirror. We march backwards into the future.

The analysts feel the future should be like the past, but nowadays that means whenever some news comes out, you’re surprised.

A second indicator of the trend toward  the me-ization of work: Dropbox announced a $250 million round of investment — which might actually be as high as $400 million — at a valuation of $10 billion (see Dropbox, now valued at $10B, raises $250M). When I reported this, several folks responded on Twitter that it seemed a bit bubblicious. But the Wall Street Journal reported that the company expected sales to rise over $200 million in 2013, which is 50X valuation, but not based totally on signups: it’s serious bank.

Dropbox’s round might step up the competition with Box, which raised $100 million last month at a $2 billion valuation.

A second example of how the financial analysts are dumb about technology: they don’t get Dropbox and its competitors. Douglas MacMillan of the Wall Street characterized Dropbox as an ‘online storage provider’, which is like calling Instagram a photo storage company.

Dropbox is worth so much because it backfills a flaw in today’s operating systems. It provides a virtual distributed operating system that is lacking in OS X, iOS, Android, and Windows. One of the companies making those OSs would be well served to step up and buy Dropbox for a premium above that $10B — which would  have to be $20B or more, I bet — to bring those capabilities back into the OS layer.

So when Google buys Dropbox for $25 billion, expect the financial analysts to be surprises that an ‘online storage provider’ could command such a price.